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January 2002, Vol. 125, No. 1

What is an employee? The answer
depends on the Federal law

Charles J. Muhl

In the American workplace today, a full-time, 40-hour-a-week employee who stays with the same employer performing the same job over the course of an entire worklife would be viewed as a rarity, or at least as a person found in lesser proportion in the U.S. workforce than in decades past. Today's workplace includes a variety of workers in contingent arrangements—independent contractors, leased employees, temporary employees, on-call workers, and more—perceived to be a result of employers' desire to reduce labor costs and employees' desire to increase their flexibility, among other things. The Bureau of Labor Statistics recently reported that in February 2001 the contingent workforce, or those workers who do not have an implicit or explicit contract for ongoing employment and who do not expect their current job to last, totaled 5.4 million people, roughly 4 percent of the U.S. workforce.¹

This article examines how the legal determination is made that a worker is either an employee or an independent contractor, beginning with a discussion of why the determination is important and then discussing the tests used by courts to make the determination and the laws pursuant to which each test applies.

This excerpt is from an article published in the January 2002 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.

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Footnotes

1 The figures reported are for the broadest of the Bureau's three measurements of the contingent workforce. For additional information, see the BLS news release, "Contingent and Alternative Work Arrangements," February 2001.

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Contingent work in the late-1990s—Mar. 2001.
Contingent work: results from the second survey.—Nov. 1998.
Into contingent and alternative employment: by choice.—Oct. 1996.
Contingent and alternative work arrangements, defined.—Oct. 1996. 
Earnings and benefits of contingent and noncontingent workers.—Oct. 1996.
What temporary workers earn: findings from new BLS survey.—Mar. 1989.